How To Get Rich: Become an Environmentalist
3 ways being more environmentally friendly can help you increase your wealth.
Many people got rich by burning fossil fuels. Others got rich while creating obscene amounts of waste. Those people are becoming fewer. That’s because the next generation of wealthy people will be environmentalists — we are already seeing this reality. The people going out of their way to protect the planet are amassing the wealth of the oil tycoons of yesterday.
You probably didn’t start Tesla (if you’re reading Elon, say hi next time you’re in Germany) but you could have invested in it. These suggestions won’t get you on the Forbes list of richest people, but they can increase your wealth quite substantially.
1. Invest in companies reversing planetary destruction.
This is not investment advice, and you should do your own research. That being said, investing in areas of disruption tends to lead to the greatest returns. Bill Gates expects 8 to 10 more Teslas to come from the Climate Tech space. When you consider climate tech touches almost every industry on earth, there are bound to be a few more Tesla-like investment opportunities in the years to come.
It doesn’t take a genius to say invest in companies like Tesla. It doesn’t take a genius to get rich either — ask Warren Buffett. Equipped with the knowledge that we cannot possibly continue burning the number of fossils we currently burn or produce the amount of waste we currently produce, you can safely assume investing in businesses reducing our reliance on fossil fuels or creating a more circular economy might lead to a strong rate of return.
Not every company that promises to disrupt an industry is going to succeed in its mission. The only thing guaranteed is that we need to reduce CO2 emissions, waste, and the negative impact we have on the planet. Businesses that solve those problems will be rewarded — so will their investors.
Beyond investing in Climate Tech, it’s been shown that companies with better ESG (environmental, social, governance) scores produce better returns. Here is a handy website that provides the ESG score for most publicly traded companies. Add that to your due diligence when deciding what companies to invest in.
If you don’t directly invest in companies, but rather through managed portfolios, you can check whether the portfolio has a sustainable investing focus to ensure you don’t miss out on those tasty gains.
Just in case you wanted a sense of the wild returns possible, if you invested in Tesla 5 years ago at the time of me writing this you would be up a whopping 2,500% ($5,000 invested would now be worth $130,000). Now, no one should expect Tesla returns from any investment, but a boy can dream.
2. Gas is trash, so save your *ss and the planet by ditching the combustion engine.
When you’re ready to purchase a new car, the best financial decision might be electric. Driving an electric vehicle (EV) is fast becoming a more affordable mode of transportation than gas-powered cars. Electricity and gas costs, as well as government rebates, will have an impact on how much you could save by switching to an EV, but the fact remains, most North Americans would stand to gain financially by the switch.
Of course, upfront costs are a factor, a big one at that. But the competition is heating up in the EV space. All the traditional gas-powered car manufacturers are trying to pull the rug on Tesla. That means more and cheaper options when it comes to buying an EV.
Let’s look at the costs. According to a report by BC Hydro (I’m a Canadian living in Germany), if you drive 20,000 kms (12,500 miles) in a year, your EV would cost you about $400 to power, whereas the gas costs would be about $1,900. Say you have had your car for 5 years, you’re looking at savings of about $7,500. If you can find the next Tesla to invest that money into, well, you remember the insane multiple that would provide.
You will also save on maintenance. Over the life of a gas car, the average maintenance cost works out to about $1,200 per year. Whereas with the EV you buy, you may only need to change the tires and add washer fluid every once in a while.
If you can get rid of your car altogether, you will have a lot more to invest in other assets that don’t depreciate so quickly in value. The options for the carless individual continue to improve with car-sharing, ride-hailing, improvements to public transit, and expanding cycling infrastructure.
3. Turn your home into a money-making machine.
For many people, their home is their greatest asset. It’s also their greatest expense. I won’t go into the specific numbers here as they will vary greatly depending on where you live, but by improving the energy efficiency of your home, you can not only reduce your energy bills, but you can increase its value. Increasing energy efficiency can add up to 9% to the value of your home while adding solar can add another 4%.
It’s possible to retrofit a home to zero energy bills. That means you pay nothing ($0.00) for the heat or energy you consume. It is actually less complicated than most think. The process is as follows;
- insulate your walls and seal any leaks with caulking,
- switch to energy-efficient windows,
- heat (and cool) your home with a heat pump, and lastly
- install solar panels.
These retrofits increase in price from retrofit 1 to 4 and depending on the incentives available in your area, installing a heat pump or solar panels may or may not result in a net-zero cost (the amount you save every month being greater than the amount you pay assuming you finance the upgrades). It will also depend on the financing terms you can get for the heat pump and solar panels. I recommend having an energy advisor do a home inspection, after which they can show you the potential savings for various retrofits. They will also be able to let you know about any local incentives.
One additional consideration for the energy produced from your solar panels: if the electricity provider in your region won’t buy the excess energy created from your solar panels during the day when you’re not there to use the electricity (or they offer a low price for it) you can mine Bitcoin with the energy instead. Contrary to popular opinion, Bitcoin is an ally of the renewable energy movement. The return on Bitcoin over the last 5 years is even better than Tesla.
The new rich stand to gain more from improving the environment, not destroying it. I know the suggestions I have laid out aren’t the only ways you can benefit financially from becoming an environmentalist. I would love to hear from you. How are you getting wealthier through your environmental choices (or poorer if you think I am totally bs-ing)?